This might depend on how you define welfare. If you define it to be something like “the intrinsic goodness of the experience of a sentient being” or something along those lines, then I would think C being better than B can’t really be disputed.
For example if you accept a preference utilitarian view of the world, and under the above definition of welfare, the fact that the person has higher welfare must mean that they have had some preferences satisfied. Otherwise in what sense can we say that they had higher welfare?
If we have this interpretation of welfare I don’t think it makes any sense to discuss that C might not be better than B. What do you think?
Under this interpretation I would say my position is doubt that positive welfare exists in the first place. There’s only the negation or absence of negative welfare. So to my ears it’s like arguing 5 x 0 > 1 x 0. (Edit: Perhaps a better analogy, if suffering is like dust that can be removed by the vacuum-cleaner of happiness, it doesn’t make sense to say that vacuuming a perfectly clean floor for 5 minutes is better than doing so for 1 minute, or not at all.)
Taken in isolation I can see how counterintuitive this sounds, but in the context of observations about confounders and the instrumental value of happiness, it’s quite sensible to me compared with the alternatives. In particular, it doesn’t commit us to biting the bullets I mentioned in my last comment, doesn’t violate transitivity, and accounts for the procreation asymmetry intuition. The main downside I think is the implication that death is not bad for the dying person themselves, but I don’t find this unacceptable considering: (a) it’s quite consistent with e.g. Epicurean and Buddhist views, not “out there” in the history of philosophy, and (b) practically speaking every life is entangled with others so that even if my death isn’t a tragedy to myself, it is a strong tragedy to people who care about or depend on me.